Economyoverview:
Costa Rica's basically stable economy depends on tourism, agriculture, and
electronics exports. Poverty has been substantially reduced over the past
15 years and a strong social safety net has been put into place. Economic
growth has rebounded from -0.9% in 1996 to 3% in 1997 and an estimated 5.5%
in 1998. Inflation rose to 22.5% in 1995, dropped to 11.1% in 1997, and
reached an estimated 12% in 1998. Unemployment appears moderate at 5.6%,
but substantial underemployment continues. Furthermore, large government
deficitsfueled by interest payments on the massive internal debthave
undermined efforts to maintain the quality of social services. Curbing
inflation, reducing the deficit, and improving public sector efficiency
remain key challenges to the government. President RODRIGUEZ has called for
an increased economic role for the private sector, but political resistance
to privatization has stalled much of his economic program.